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GOLD FORECAST CHANGES; GOVERNMENT SPENDING QUESTIONED

Most financial experts are forecasting the Gold price to increase in 2013 for the 13th year in a row. However, some financial institutions are scaling back their initial Gold forecast. “The Gold market tends to look beyond headline inflation, to what the reaction of the central banks is going to be. Even though inflation has been rather low for the past couple of years, the Gold market went very strong, because it correctly identified that the central banks around the world are going to keep the spigot on. Even when inflation does begin to rise, if investors sensed there were going to be a steep ratcheting up in the interest rate, that would be the end of the bull market,” James Steel, chief Precious Metal analyst at HSBC, said.

The United States debt ceiling is dominating the financial news as of late, and for good reason. If the government does not find a way to avoid hitting the debt ceiling, the result could be disastrous. There are some financial experts who believe it could trigger a new recession in the country. Tim Phillips, president of Americans for Prosperity, says the focus should not be solely on the debt ceiling, but the amount of government spending. “We’re saying calibrate your message. Focus on overspending instead of long-term debt. Focusing on [the debt ceiling] makes the messaging more difficult.”

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